HOOT4 Hotéis Othon

Hotéis Othon S.A., issuer of HOOT3 and HOOT4 shares traded on B3, is a traditional Brazilian company in the hotel sector, with a history dating back to the early 20th century. The group’s origins are linked to entrepreneur Othon Lynch Bezerra de Mello, who began his business activities in 1905 with a fabric store in Recife and, over the decades, expanded into sugar mills, power generation, agribusiness, insurance and, finally, hospitality. In 1943, Companhia Brasileira de Novos Hotéis was founded, the formal milestone of the current Othon Hotels chain, which would consolidate itself as a major hotel chain with domestic capital. The first hotel, Aeroporto Othon, opened in 1944 in downtown Rio de Janeiro, marking the beginning of the company’s trajectory in the lodging market.

Over the following decades, Othon Hotels built a significant presence in Brazil’s main state capitals. In 1954, the chain began operating the Othon Palace in São Paulo, next to the Viaduto do Chá, in a strategic area of the city’s financial center. The main expansion, however, took place in Rio de Janeiro, especially in Copacabana, where the chain anticipated the neighborhood’s tourism potential even before the beach became an international reference. Between the 1970s and 1980s, five-star hotels such as Rio Othon Palace, Bahia Othon Palace and Belo Horizonte Othon Palace were opened, during which time the company became one of the largest hotel chains in South America. In the 1990s, capitalizing on its accumulated know-how in lodging, the company also began managing third-party hotels through management contracts.

Othon Hotels’ activities are focused on hotel operations, with an emphasis on lodging, events and conferences, serving both business and leisure tourism, for Brazilian and foreign guests. The company’s corporate purpose is to operate in the hotel industry, providing services related to this segment. Historically, the chain has combined owned operations with the management of third-party developments and condominiums under the Othon Suítes brand, primarily targeting corporate guests. From 2020 onwards, however, the COVID-19 pandemic strongly impacted revenue and the results of managed units, leading management to discontinue operations that did not meet the required minimum return, including through the divestment of hotels and the sale of assets in markets such as Belo Horizonte and Salvador.

In the recent restructuring cycle, the company concentrated its activities on owned units in Rio de Janeiro, which are now the core of the business. In 2024, Othon Hotels operated two hotels: Rio Othon Palace, an upscale hotel facing the sea on Copacabana’s waterfront, with 582 rooms and 11 event rooms; and Savoy Othon, an economy hotel with 145 rooms, located on Avenida Nossa Senhora de Copacabana, two blocks from the beach, with easy access to shops, restaurants and the subway. In addition to the hotels, the company acquired the concession of two kiosks on Copacabana Beach under the Wave by Othon brand and invested in renovating the rooftop of Rio Othon Palace, including modernizing the Skylab restaurant and building an infinity pool, enhancing the main asset’s appeal for leisure and events.

From an operational and market standpoint, Othon Hotels operates exclusively in the hotel segment with owned hotels, treating this activity as its single cash-generating unit. The company has sought to strengthen direct and digital sales channels, with a strong emphasis on online distribution. Investments in websites, booking systems and CRM aim to increase efficiency in attracting guests and managing customer relationships. The company highlights its social media presence—especially the Rio Othon Palace profile on Instagram—as a key engagement channel and driver of direct bookings on its website. In 2024, average occupancy was 68% at Rio Othon Palace and 81% at Savoy Othon, in an environment of strong demand and a recovery in the average daily rate compared to the previous year.

Othon Hotels’ customer base is diversified among corporate and leisure travelers, both domestic and international, with an important contribution from digital intermediaries. In 2024, the five main commercial partners were lodging distribution platforms Booking.com, Decolar.com, Expedia, Hotusa Hotels and Royal Holiday, which together accounted for around 63% of sales. Even so, direct sales through the company’s own website and call center are among the main sources of revenue, indicating the growing importance of this channel for the business model. From a geographic perspective, the state of São Paulo is identified as the main source of guests, followed by Rio de Janeiro itself, reflecting both domestic tourism and corporate demand. In the international market, the company uses Sabre Corporation and other global distribution systems, as well as OTAs and platforms such as Omnibees, to reach various markets abroad.

The company’s revenue is heavily exposed to foreign guests, which underscores its positioning in international tourism. In 2024, 59.91% of net revenue came from foreign clients, while Brazilian guests accounted for 40.09%. Among countries of origin, in addition to Brazil, Chile, the United Kingdom, Argentina, France, China, Italy, Peru, Mexico, Germany, Colombia, Portugal, Paraguay and Spain stand out, all with a measurable share in the revenue mix. In terms of operating financial performance, the company reported a strong recovery after the most critical period of the pandemic: GOP (gross operating profit) rose from R$ 1.7 million in 2020 to R$ 38.6 million in 2022, R$ 67.1 million in 2023 and R$ 69.5 million in 2024. EBITDA, which was negative in 2020 and 2021, turned positive in 2022 and increased in subsequent years, reflecting a combination of restructuring, demand recovery and focus on profitable units.

On the regulatory front, Hotéis Othon S.A. highlights the CVM – Comissão de Valores Mobiliários (Brazilian Securities and Exchange Commission) as the main authority responsible for regulating its shares traded in the Brazilian capital markets, emphasizing the maintenance of transparency with the regulator and shareholders. The company also reports that, in its relationships with suppliers and in the purchase of inputs for hotel operations, it is not subject to specific government control or regulation and does not depend on a small number of suppliers, relying on a broad network and passing any cost variations on to final lodging prices. Internationally, the company notes that its operations follow Brazilian law when transactions are concluded.

In environmental, social and governance (ESG) matters, Othon Hotels states that it does not yet publish a sustainability report but describes a set of internal practices aimed at mitigating the environmental and social impacts of its operations. Initiatives include environmental awareness programs for employees, encouraging the reduction of water waste and selective waste collection, with disposal through specialized recycling companies. The company participates in actions such as World Cleanup Day for beaches, in partnership with Instituto Aqualung, supports social projects through initiatives such as Cardápio Solidário with Instituto da Criança, and runs the Othon Verde program, which involves guests in reducing water and energy consumption by extending the interval between linen changes. There is also a focus on inclusion, diversity and improving organizational climate, as well as recent initiatives to reduce paper usage and adopt materials with lower environmental impact.

With this profile, Othon Hotels, through its HOOT3 and HOOT4 shares on B3, presents itself as a company essentially focused on the travel and leisure segment, with significant exposure to international tourism and a focus on operating two strategic assets in Copacabana. For retail investors, understanding the chain’s historical evolution, its post-pandemic restructuring, the dynamics of its sales channels and demand mix, as well as its ESG initiatives and regulatory context, is key to analyzing the risks and prospects associated with the hotel business and revenue generation in a sector sensitive to the economic cycle and the flow of domestic and foreign tourists.